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Apr 16, 2013

Managing Partner Non-Billable Time in a Law Firm – How Much?

Question:

I am a partner in a 17 attorney firm in Madison, Wisconsin. We are a business law firm and we have ten partners and seven associates. We are managed by a managing partner, one of my partners, and he also practices law. We pay him his standard client bill rate for his non-billable time spend on law firm management. For the last couple of years his non-billable hours spent managing the firm have been increasing to the point where he is now spending 50% of his total time – 1000 hours a year managing the firm. This has caused tension in the firm and my partners and I are concerned. I would appreciate your thoughts.

Response:

I would concur that this amount of time is excessive for a firm your size. Even if you stay with the managing partner model of governing your firm – most managing partners in firms your size are able to get the job done for around 500 non-billable hours a year – 25% or less of their total time. You may want to consider the following:

  1. Put in place a budget for the total non-billable hours that the firm will pay the managing partner.
  2. Clarify the duties, role, responsibilities, and projects that the managing partner should be spending his time.
  3. Review the overall governance/management structure that the firm has in place.
  4. Consider supplementing the Managing Partner with an Office Manager or Firm Administrator.
  5. Consider whether the managing partner role is still the most appropriate approach for your firm.

I suspect that your managing partner is either not delegating to staff some of the day to day management tasks or he does not have sufficient billable work to stay busy.  At $275 bill rate – 1000 hours per year costing the firm $275,000 a year. I believe that a firm your size can handle this function more economically.

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John W. Olmstead, MBA, Ph.D, CMC

 

Posted at 09:51 PM in Governance
Tags: Managing partner non-billable time in a law firm

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